Patent dispute leads Keene firm to file for bankruptcy

Published: March 27, 2013

Samson Manufacturing Corp., a manufacturer of gun accessories that moved to Keene from Massachusetts last year with a federal grant and the promise of new jobs, filed for Chapter 11 bankruptcy protection Monday to forestall a million-dollar judgment awarded in an intellectual property dispute with Troy Industries, a Massachusetts competitor.Samson is doing well financially, said owner Scott Samson and his attorney Peter Tamposi. The company's 37 workers - more than 25 have been hired since the company moved to New Hampshire last April - will keep their jobs, and the creditor will eventually be paid in full while a patent dispute filed by Troy CEO Stephen Troy Jr. works its way though federal court in Boston.That federal dispute was put on hold until a state case is resolved over the alleged violation of a confidentiality agreement that dates back to 2007.Various appeals and Samson's move to New Hampshire delayed any payment of a judgment. But a Cheshire County Superior Court judge issued an order in January to enforce the judgment, which with interest now totals $933,000."I do not have $933,000 in a checking account," Samson told NHBR. "We made several offers to pay it off in full over 11 months, but they wouldn't accept any partial payment. They wanted to see us dead."By filing for bankruptcy, Samson appears to be turning the tables against Troy. On its website, the company asks its creditors and customers to "please bear with us while we deliver a quick and well-deserved smackdown."An attorney for Troy Industries declined comment.The dispute between the two rivals goes back to 2003, when -- according to Troy in its federal complaint -- Samson agreed to machine a Modular Rail Forend, or MRF, a "free floating" metal tube with holes in it that surrounds the muzzle of a rifle, allowing the shooter to easily mount various sighting accessories.The Troy-Samson deal fell apart in November 2004 over disputes concerning billing, delivery and quality, according to Troy's complaint.Over the ensuing months, both companies filed for patents for the assembly. Samson got there first. Samson won a legal battle in patent court, and Troy's filing in federal court is basically an appeal of that decision.The Massachusetts suit was filed over the same product but focuses on whether Samson stole Troy's ideas in making the assembly. In that case, Troy won, securing a final judgment in December 2012. But by that time, Samson had left the state, forcing Troy's attorney to try to collect that judgment in New Hampshire.There was no mention of the dispute when Samson Manufacturing moved in April 2012 from Whately, Mass., to a 20,000-square-foot building on Forge Street in Keene, with the help of a $470,000 Community Block Development Grant through the Monadnock Economic Development Corp. Samson promised to create 25 jobs -- a promise, Samson said, that he has kept."We've been busy 24/7, and we were hiring more," he said.U.S. Senator Kelly Ayotte even used the ribbon-cutting as a photo opportunity, shooting off a rifle in a business skirt and suit and lauding Samson for supplying police officers and soldiers with the tools they need.At the time, Scott Samson, who has lived in Spofford for more than a dozen years, said the firm made the move to be closer to such customers as Sturm Ruger in Newport and Sig Sauer on the Seacoast, and because the Granite State is more friendly to both businesses and guns than its neighbor to the south.Besides the Troy judgment, in its bankruptcy filing Samson also lists an $88,000 disputed debt to Arms Inc. (also being sued by Troy) and $91,000 to Easthampton Quality Machine Company. Both are in Massachusetts. Its biggest New Hampshire creditors are Fuller Machine of East Alstead ($54,000), Thompson Investment Casting of Rochester ($28,000) and MHR Resources North of Lempster ($26,000).The creditors have been "incredibly supportive" of Samson, said Tamposi, adding, that the company has doubled its sales since last year and "is in a position to do very well."Tamposi said he plans to file a bankruptcy plan soon. If approved, it would repay all creditors in full except for Troy. That payment would be put off until the patent dispute is resolved in a federal court. - BOB SANDERS/NEW HAMPSHIRE BUSINESSS REVIEW

This article appears in the Archive 2013 issue of New Hampshire Business Review